BSc Business Management: Company Types, Structures, & External Factors

This report provides an overview of different types of companies, including micro, small, medium, and large businesses, detailing their characteristics and operational scales. It further examines various business structures, such as sole proprietorships, partnerships, limited liability companies, public limited companies, and cooperatives, highlighting their features, advantages, and disadvantages. The report also analyzes the impact of external factors on business performance through a PESTLE analysis, focusing on political, economic, social, technological, legal, and environmental influences, using Sainsbury as an example. Organizational structures like functional and divisional are also explored, with a discussion on how they affect business productivity. The report concludes that understanding these elements is crucial for businesses to achieve their strategic goals and adapt to the dynamic business environment. Desklib provides access to this and other solved assignments to support student learning.

BSc (Hons) Business Management with
Foundation
BMP3002
Business in Practice
Assessment 1
Types of Companies
1

Table of Contents
INTRODUCTION..........................................................................................................3
SECTION 1...................................................................................................................3
Different types of companies and how they work................................................3
SECTION 2...................................................................................................................5
Different companies from sole traders to cooperatives and Limited Liability
Partnerships.........................................................................................................5
SECTION 3...................................................................................................................8
Different business structures and external factors affecting business................8
CONCLUSION............................................................................................................10
REFERENCE..............................................................................................................12
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INTRODUCTION
An organization wok in different manners, and perform their role in a specific
industry of sector, where number of growth opportunities available for them. They
conduct several practices, for purpose of reaching desire outcomes, including aim
setting, etc. The aim of current report is to explain different types of organizations,
their work and characteristics. It will also specify the varied business, structures and
the impact of external factors upon businesses.
SECTION 1
Different types of companies and how they work.
Micro business:
Definition-
A venture that systematically and ethically operates on a quite small scale or
level, is refers to micro business (Baharuddin and et.al., 2022). These types of
ventures, usually work with few people, who are able to provide satisfactory services
and products to the customers.
Characteristics-
Simple structure of business-
The key feature of micro business is the current one, which enable them to
make their work profitable and beneficial too (Sanchez-Riofrio and et.al., 2021). As
they have a simple and easy or small structure, which define clarify of their work, role
and responsibilities.
Specific customer focus-
Another feature of similar category of company, is particular consumer
concentration, which lead to manage workers performance. It is quite easy for micro
small ventures, to focus on specific customers, who are taking interest to purchase
products from them and take pleasure of services they provide.
Easy to manage-
In the recent time, it is quite easy for micro ventures to manage their
businesses in effective manner, which considered as their key feature that affect
positively in varied manner.
Small business:
Definition-
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A business or organization that functions on a small level includes less
number of candidates, capital investment and fewer technologies as well as
machines to operate functions, are named as small businesses (Ismatullayevich and
Bulturbayevich, 2021).
Characteristics-
Limited reach-
The first key feature of small size ventures is current one, which means
companies at small scale level have limited areas of operations that they easily
manage and work with that.
Flexibility-
The best feature of small size venture is flexibility as they have an opportunity
to manage change and take decisions to modify anything from operations to daily
practices.
Management-
Small ventures are easily managed as they have a good control on
employees and ventures performance, which might be easy to manage and monitor
as well.
Medium size business:
Definition-
A company with average annual revenue, not profitability, but revenue of
between 10 and 1 billion is named as medium size companies.
Characteristics-
Organizational structure-
The best thing about medium size venture is that, there organizational
structure is flat, which enable manager to manage everything, from marketing to
product delivery. With this type of structure, they can gain unpredictable benefits
such as to manage employees performance and identify the areas for current and
further development.
Decision making-
Another feature of medium size company is current term, which mean they
have power and chance to take decision without others interference, which in turn
provide desire outcomes to who are engaged in running this category of venture.
Less efforts-
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In medium size companies, management or manager put less efforts as they
are on low level, which drive their attention toward improving existing performance of
company, instead of beating rivals.
Large size business:
Definition-
Those organizations that have vast scope and size are included in category of
large size companies (Nti and Osei, 2022). These types of firms usually employ
more than 250 candidates.
Characteristics-
Market reach-
The key feature of large size companies is that they have large market reach
in term of managing venture from national to international level. The scope and size
of large companies are far better than the other category of ventures, including
small, medium, etc.
Customer base-
They have wide customer base, among which each buyer is able to conduct
word of mouth promotion, throughout that firms can easily generate their brand
awareness, in cost effective method.
Good management-
Another feature that a large size company have is good management, as
individual person in the administration hold excellent knowledge about their work and
capable to manage other, in term of implementing new strategies and approaches.
SECTION 2
Different companies from sole traders to cooperatives and Limited Liability
Partnerships
Sole trader business:
Definition-
A sole trader venture is also considered as solve proprietorship, which means
a company that owned and managed by on person (What is a Sole Trader: Meaning
& Definition, 2021).
Characteristics-
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Full control-
Sole trader ventures have number of features that they can utilize to reach
desire outcomes. They can have good control on business activities and practices,
as they are accountable to take decision independently.
Unlimited liability-
Another feature that associated with sole trader companies is current one,
which defines that unlimited benefits that an owner have, which might be anything.
They may assume overall legal accountability for all the venture debts.
Continuity-
Continuity as the feature of sole trader business relate to the above features.
As there is not any legal distinction between ventures and entrepreneurs, a solder
trader is dependent on their owner.
Partnership:
Definition-
When a company work with other organizations or brands in the world of
business, they considered as partnership ventures.
Characteristics-
Sharing profits-
According to the first characteristic, management can take pleasure of sharing
profits or benefits they obtain, which create a good professional relations with key
stakeholders.
Good risk management-
Along with above benefits, partnership organizations can get opportunity to
handle risk with other stakeholders, including collaborative partners, who can provide
their opinions and suggestions.
Nature of liability-
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It can be said that the nature of liability as key asset of partners is the similar
as in case of sole trader business. It may provide owner right to recover
organizations debts from private property or assets.
Limited liability business:
Definition-
The current form of companies are considered as hybrid unincorporated
ventures structure that encompasses pass through tax model of sole trader and
partnership.
Characteristics-
Separate entity-
Limited Liability businesses had a separate legal unit, which is the key feature
that they have and use for longer time.
Simplicity-
The simplicity of companies such as LLC is another characteristic that they
use in term of casing document and carrying out the key operations.
Limited Liability-
One of the best features of LLC is limited liability that reduce the level of
conflict in the workplace or overall management structure.
Public limited liability business:
Definition-
PLC designate a firm that offer shares of stock or profit to general public, that
lead to increase the level of benefits that each stakeholder can take.
Characteristics-
Easy transferability-
Key stakeholders in the public limited companies have feature to easily
transferable, shares to the public.
Directors-
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They have good directors, who are able to move a company towards success,
which was unpredictable by the high authority.
Minimum subscription-
The current term is also included in the list of public limited liability companies
characteristic, as it affect positively in form of obtaining competitive benefits.
Cooperative:
Definition-
Cooperative refers to those companies that are owned by member owners
and controlled by the same.
Characteristics-
Open membership-
The members have opportunity according to current characteristic of
cooperative ventures to share their reviews and point of views.
Limited Interest on capital-
Companies are recognized the capital is essential and beneficial for managing
business practices, but it will be relegated to level of a master.
Good finances-
The excellent characteristic of these companies is good finances that they
have and used to achieve the key goals, wither small, long or medium term.
SECTION 3
Different business structures and external factors affecting business
3.1 Identification of different organizational structures and explaining how
does organizational structure affect business productivity-
Functional structure-
The current term refers to a form of legal business format that effectively and
appropriately organize a venture into varied departments based on areas of
excellence and expertise. Each department serve as functional or operational unit
and are overseen by the functional or operational manager, who are accountable to
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evaluate, monitor and analyse everything that covers under their designation in the
organizations. It helps organizations to succeed further in term of dividing the major
or main organizational functions into varied groups, so that it develop clarify in the
workplace about roles and responsibilities among employees. Along with above
benefits, the utilization and selection of functional organizational structure can
provide more benefits to the firms, in term of providing support to run ventures and
generate revenue more than rivals, who are running the same category of
businesses in the similar market.
Impact on business productivity-
It can be said that functional structure can put positive impact on
organizational productivity in term of developing awareness among people about
their role. While, it may put negative impact on same term in term of creating barriers
to communicate and collaborate, due to gap or division of functional units.
Divisional structure-
Divisional organizational structure is identified as appropriate system in which
enterprises segment their candidates based on markets, goods and opposed to their
roles. It can be said that in some organizations, marketing, communication and sales
departments have provided their roles according to category of work, opposite to
their duties.
Affect business productivity-
With divisional organizational structure, management can take pleasure of
increasing competitiveness and gaining competitive advantages that affect positively
upon their productivity. While it can impact in other manner as well, such as reducing
concentration on entire direction of the firms, that lead to decrease the productivity.
3.2 How different external factors affect the performance of a business
PESTLE analysis is utilized for purpose of conducting external business
environmental research, which provide opportunity to affect Sainsbury, either in
positive or negative manner.
Political factor-
In case of chosen company, political factors may put positive impact on
venture growth and success, as political stability in the UK and other nations where
supermarket exist, drive the attention of management toward developing new plans
to proceed further (Casañ, Alier and Llorens, 2021).
Economic factor-
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In the recent time, due to pandemic the impact on economy has still
considerable. As it can put positive impact on Sainsbury, as people prefer to shop
from those outlets where the hygiene factor is prioritized and chosen company is one
of those outlets.
Social factor-
Current market trends such as online shopping, etc. can put positive impact
on Sainsbury, in term of providing opportunity to enhance or increase customer
base, which is not that easy for any company to do that, as it affect their
performance and productivity too.
Technological factor-
In the recent time, the advancement of technologies plays significant role in
the success of companies, either small or large. In case of Sainsbury, technology
advancement put positive impact on business that lead to increase the productivity
and effectiveness of operations, even better than last few years or months.
Legal factor-
Regulatory changes can put negative impact on Sainsbury, in term of creating
challenges for management to manage business operations and functions.
Furthermore, it also leads to create negative environment in the company that is not
suitable for its growth.
Environmental factor-
The current factor may put positive impact on Sainsbury in term of enhancing
the satisfactory level of stakeholders, including customers, employees, and other as
they fulfil their needs and ready to work with the brand. In the recent time, by
conducting sustainable practices, firm grow rapidly and create the good brand image
in the market, which is quite challenging for other companies or supermarkets to do
that.
CONCLUSION
On the basis of above discussion, it has been concluded that the small, micro
and other types of companies has achieved their strategic goals, because of using
their key features. As it enables them to conduct effective and appropriate
organizational practices, in positive manner, which is not that easy for the companies
to do that. Furthermore, by summing up above discussion, it has been summarized
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that firms has improved their performance and developed strategic tactics, after
implementation of PESTLE analysis, that helped to specified number of external
factors.
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REFERENCE
Book and Journals
Baharuddin, A and et.al., 2022. Improving Marketing Performance Through Digital
Marketing For Micro Business Actors In The Trade Sector Registered At The
Cooperatives And Smes Service Office. Pinisi Discretion Review. 5(2).
pp.411-416.
Casañ, M. J., Alier, M. and Llorens, A., 2021. A collaborative learning activity to
analyze the sustainability of an innovation using PESTLE. Sustainability.
13(16). p.8756.
Ismatullayevich, S. I. and Bulturbayevich, M. B., 2021. DEVELOPMENT OF SMALL
BUSINESS AND PRIVATE ENTREPRENEURSHIP IN THE ECONOMY OF
THE REPUBLIC OF UZBEKISTAN. Academicia Globe: Inderscience
Research. 2(6). pp.419-425.
Nti, N. K. and Osei, C. D., 2022. Business Characteristics and Entrepreneurial
Management Practices of Small and Medium Enterprises in Ghana. IJEBD
International Journal Of Entrepreneurship And Business Development
eISSN 2597-4785 pISSN 2597-4750. 5(4). pp.648-659.
Sanchez-Riofrio, A. M and et.al., 2021. Gender-based characteristics of micro, small
and medium-sized enterprises in an emerging country: is this a man’s
world?. Journal of Entrepreneurship in Emerging Economies.
Online
What is a Sole Trader: Meaning & Definition. 2021. [Online]. Available Through:
<https://www.goforma.com/self-employed/what-is-a-sole-trader-meaning-
definition>
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